2001 12 13 BAWA Minutes, Special•
MINUTES OF THE SPECIAL MEETING
OF THE BOARD OF DIRECTORS
OF THE BAYTOWN AREA WATER AUTHORITY
December 13, 2001
The Board of Directors of the Baytown Area Water Authority, Harris County, Texas, met in
special session on Thursday, December 13, 2001, in the Hullum Conference Room, Baytown
City Hall, 2401 Market Street, Baytown, Texas, with the following in attendance:
Robert L. Gillette, President
Dan Mundinger, Vice President
Peter R. Buenz, Secretary
Knox Beavers, Board Member
Sam T. Schulze, Board Member.
The meeting opened with a quorum present, and the following business was conducted.
Consider approval of the minutes for the meeting held on November 20, 2001.
Board Member Buenz moved approval of the minutes of the meeting held on November 20,
2001. Board Member Beavers seconded the motion. The vote follows:
Ayes: Board Members Beavers, Buenz, and Schulze
Nays: None
Abstentions: President Gillette and Board Member Mundinger.
The motion carried.
Consider Proposed Resolution No. 011213-1, authorizing the issuance of Baytown Area Water
Authority Waster Supply Contract Revenue Bonds, Series 2002 (City of Baytown project).
Proposed Resolution No. 011213-1 authorizes the issuance of $3,800,000 in certificates of
obligation to finance the next phase of the expansion of the plant to a capacity of 26 million
gallons per day. This expansion was projected to be necessary to provide adequate water service
to the City of Baytown and other customers of the Authority. Our financial advisor, Drew
Masterson with First Southwest, as well as bond counsel, will be present to provide information
concerning the interest rate and other matters related to the bond sale.
Drew Masterson, First Southwest, reported that the rating for the Authority had been upgraded
by Standard & Poors to match the rating given by Moody's. The rating from each agency is now
an A rating, which is an excellent rating for a water revenue bond. The bonds were
competitively bid and the lowest bidder was Prudential Security with an average rate of interest
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Minutes of the Special Meeting — December 13, 2001
of 5.11% over the life of the bonds. The yield varies from 3.18% in 2004 to 5.3% in 2020. The
interest rate is close to the lowest rate in the last five years. Acceptance of the low bid from
Prudential Securities was recommended.
Board Member Mundinger moved approval of the resolution. Board Member Schulze seconded
the motion. The vote follows:
Ayes: Board Members Beavers, Buenz, Mundinger and Schulze
President Gillette.
Nays: None.
The motion carried.
Consider Proposed Resolution No. 011213-2, approving a grant agreement with the Harris -
Galveston Subsidence District.
Proposed Resolution No. 011213-2 approves the grant agreement with the Harris -Galveston
Subsidence District in the amount of $79,873. The grant funding will cover part of the capital
buy -in fee for Country Terrace Water Company becoming a customer of the Authority. The
grant is contingent upon Country Terrace's payment of their disincentive fees to the Subsidence
District. The grant is to be used solely for payment of Country Terrace's capital buy -in fee.
Should the project not be constructed, the grant funds would be returned to the Subsidence
District. On September 19, 2001 the Board approved application for the grant.
Board Member Buenz moved approval of the resolution. Board Member Beavers seconded the
motion. The vote follows:
Ayes: Board Members Beavers, Buenz, Mundinger and Schulze
President Gillette.
Nays: None.
The motion carried.
Consider Proposed Resolution No. 011213-3, ratifying an amendment to the Resolution relating
to the contract with Houston -Galveston Area County for electric power purchases.
Proposed Resolution No. 011213-3 ratifies an amendment to the resolution relating to the
contract with Houston -Galveston Area Council for electric power purchases for two years due to
a contract increase. The prices proposed are reasonable, but exceed the indicative prices
approved by Board in the original action. The change in the anticipated rate is $0.009 to
$0.0523573 per kilowatt-hour.
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Minutes of the Special Meeting — December 13, 2001
Board Member Buenz moved approval of the resolution. Board Member Schulze seconded the
motion. The vote follows:
Ayes: Board Members Beavers, Buenz, Mundinger and Schulze
President Gillette.
Nays: None.
The motion carried.
Receive financial statements for the fiscal year ending September 30, 2001.
Donna Sams reported that the revenues were 1.9% less than fiscal year 2000 because of the
incidents of rain and the expenditures exceeded fiscal year 2000 expenditures by $190,000 due to
the increased costs of chemicals and electricity. No additional debt is planned for issuance over
the next three years.
Mark Tiller, Tiller & Company, P.C., reported that the audit resulted in an unqualified opinion.
The records of the Authority are in good order with positive increases in cash and equity.
In response to an inquiry, the mineral royalty receipts are expected to be reduced from prior
year's receipts.
Manager's Report.
Fred Pack, BAWA Director, reported that installation of the SCADA equipment and site work
remained on the expansion project. The new facility should be tested in the next weeks.
Adjourn
As there was no further business to be transacted, the meeting adjourned at 4:25 p.m.
G. fi W. ith, Assistant Secretary